IBM's Watson makes the jump from Jeopardy to financial planning

Supercomputer can sort through vast amounts of information, giving advisers more time with clients

Jan 16, 2014 @ 12:55 pm

By Jason Kephart

Three years after making mincemeat of two of Jeopardy's most decorated champions, IBM's supercomputer Watson is making the leap into financial planning.

Last week, IBM announced the launch of the IBM Watson Group, a new business unit that will bring cognitive computing to businesses, including financial planning. Cognitive computing is a new area of technology that is able to think for itself, to an extent.

“What Watson does at its most basic level is it reads a lot of information and it understands it,” said John Gordon, vice president of IBM Watson Group.

The world got a sense of just how well Watson can understand complex information when it starred on the television game show Jeopardy three years ago and was able to beat both Ken Jennings, who holds the longest Jeopardy winning streak, and Brad Rutter, who is the all-time money winner, handily.

Since then, Watson has improved its performance by 2,400%, and gotten 24 times faster and 90% smaller, according to IBM.

IBM has already announced a partnership with Singapore's DBS Bank to help manage its wealth management clients, and Mr. Roberts sees a lot of potential to help advisers in the U.S.

“Every adviser has their own approach,” he said. “Watson can help make them better. It can provide the right information to help scale the number of clients.”

Watson's biggest contribution to advisers will be how it helps sort through vast amounts of information, only flagging articles or reports that could lead to a change in how an adviser thinks about an asset class or individual security, Mr. Gordon explained. That will leave advisers more free time to work directly with clients and focus on finding new ones.

When it comes to new clients, Watson can also act as a first contact to help them with simple questions they may be hesitant to ask a financial adviser.

“Some people don't like to stop and ask for directions but no one minds using a GPS,” Mr. Gordon said. “Watson can answer questions that, at first, clients don't want to talk to a financial adviser about because they think it's too complicated or they don't have enough money.”

IBM has not released a rollout schedule and Watson isn't going to be immediately practical for smaller advisers, but the company's plan is eventually to open up the system to businesses of all sizes. It's cloud-based, so advisers won't have to buy any hardware to run it.

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